Nick Xenophon (SA, Independent) Share this | Hansard source

I did not get an opportunity to make a contribution on the second reading. I will not as such, but I will just say that I express my reservations in respect of the Private Health Insurance (Prudential Supervision) Bill 2015, and I also want to express my concerns about the affordability of private health insurance generally. The coalition did walk away from its promise on the issue of restoring the rebate and issues of indexation. I think it is important that we have a health system where there is a good balance between the public and private systems. We know what the Productivity Commission said a number of years ago about this when it undertook an analysis of how the two systems operate side by side—the number of very good things that the public system does and the good things that the private system does. I am concerned that, as a result of changes under the former government, private health insurance is becoming less and less affordable and that we are heading to a dangerous tipping point where more and more people will downgrade their cover, which will force people onto the public hospital waiting lists for ancillary services and the like. Also, if you put more pressure on private health funds, it makes them less attractive, and ultimately you end up with a shift to the public sector, which is not a good thing in itself, because of additional waiting lists and the like.

I just want to ask for some clarification on two particular issues. I note that the legislation allows APRA to raise an investigation into a private health insurance fund where there are concerns that it has not acted in the best interests of its members. In principle, I do not believe there is any objection to this. Some concerns have been raised, however, with the drafting of that particular clause and how widely it might be applied. One example that has been raised is the issue of increasing premiums. An argument could be made that, in and of itself, paying more is not in the best interests of a fund's members, even though the fund is legally allowed to increase premiums. Of course, if a rise in premiums allows the fund to offer better services or to continue operating effectively, this should be taken into account. I would be grateful if the minister could clarify the application of this provision and how APRA may be able to use these powers. In other words, how broad will it be? How broad is it envisaged to be in respect of this?

While the minister is looking at that, I will just say parenthetically that issues that I raised in estimates about private health insurance affordability go to issues of prosthesis safety and quality and allegations of price gouging with prosthesis funding arrangements, where the private health funds, I think, have not been listened to sufficiently by government in terms of dealing with those issues. I think that dealing with those issues will be unambiguously good for both health consumers and private health funds. If there are less than optimal or, shall we say, somewhat dodgy prostheses, why are they getting funding? Why are they on the market? We have had two inquiries into this in respect of the TGA.

So my question is: how broad is this provision in respect of this, and how will it be used?